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1 hour ago
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SEC allows tokenized U.S. stocks to trade on-chain for five years

2 min

The SEC approved a temporary Innovation Exemption that permits qualifying Tokenized Securities Venues to trade tokenized National Market System stocks on-chain using permissioned automated market makers and liquidity pools. The relief lasts five years from publication and establishes a controlled path to test on-chain execution while preserving investor protections.

TL;DR

  • Temporary exemptions allow certain tokenized U.S. stocks to trade on qualifying on-chain venues.
  • Relief duration: five years after publication.
  • Conditions apply: investor rights, auditable smart contracts, trading halts, disclosures, symbol and volume limits.

Scope and Duration

The Innovation Exemption enables limited secondary trading of tokenized shares that correspond to U.S. listed equities. It expires five years after publication unless superseded by a new framework.

Core Conditions

  • Parity of rights: tokenized shares must grant holders the same rights and privileges as the underlying stock.
  • Market linkage: if the primary exchange halts the underlying stock, trading of its tokenized version must stop.
  • Smart contracts: must be public, auditable, and deployed on a public permissionless distributed ledger.
  • Venue constraints: limits on symbols and trading volume, plus required disclosures and investor protections.

Implications for Market Structure

The exemption does not create a parallel stock market. It authorizes a different technical rail to trade the same economic asset under existing market rules. The SEC will collect feedback during the exemption period to inform potential longer-term regulation. Tokenized equities do not replace conventional markets, but for the first time there is an explicit regulatory lane for limited on-chain secondary trading of U.S. listed shares.

Source: U.S. Securities and Exchange Commission — https://www.sec.gov/newsroom/press-releases/2026-90-sec-issues-innovation-exemption-facilitate-trading-tokenized-nms-stock-request-comment